Cuts to services could have been ‘pretty catastrophic’ if they hadn’t been given some financial leeway by the Government, the chief executive of Northamptonshire County Council has said.
The council announced its final proposed budget for 2019/20 earlier this morning, in which it will take advantage of government permission to raise council tax up to a maximum of 4.99 per cent. The authority was already raising it by 2.99 per cent - the legal limit before a referendum must be called - before the Government gave permission to increase it by a further two per cent.
The council tax rise will bring in an extra £5.8million for the council, which it is pumping into restoring winter gritting, scrapping plans to charge community uniformed groups for the use of schools, and an extra £1.2million into the children’s services.
It follows on from a dispensation from the Government that allowed the council to use £70million of capital funds - normally reserved for building and infrastructure projects - to be used towards its revenue stream.
But chief executive Theresa Grant says things would have been ‘a lot more difficult for residents’ if the Government's bail out had not been allowed.
She told the Local Democracy Reporting Service: “The capital dispensation came with very clear rules that we would clear the 17/18 debt which was around £41million. That takes quite a chunk of that dispensation out. The accounts haven’t been signed off yet for last year, KPMG is still working on it.
“We also had a clear instruction that we would put £20million into a reserve that will help unitaries in the future. So it leaves very little room for manoeuvre with the remaining dispensation.
“We have no choice but to balance the books though, so we would have found a way to do even had we not had the flexibility of that. And what it has done is clear last year’s deficit, which is huge. Had we had to do that through services it would have been pretty catastrophic, and we’ve managed to do this year and next year without a slash and burn approach.
“Had we taken a more difficult approach it would not have been good for residents and also it would have meant going into unitary authority cutting services that it’s very difficult to bring back once you’ve done it. The dispensation is a way of going into the new era with services that are robust and we’ve managed to keep during these difficult times.
“Had we have to find another £41million for last year, it would have been very difficult and needless to say would have meant going to the core services as was agreed by council. But fortunately, we’ve not had to do that.”
Council leader Matt Golby added: “I have every confidence that Theresa and her team would have balanced the budget, but we would have been left with some very difficult decisions. The point around dispensation shows that there is confidence from the Government in our attitude and the way we are dealing through the issues.”
The county council has virtually plenished all of its reserves in order to make recent budgets balance, and Mrs Grant says that this is something that the council needs to learn from in future.
She said: “In the past, the council has seen fit to use up nearly all its reserves, so there are very little reserves, and that’s why it’s really important that as a minimum we have that £20million from the capital dispensation going into reserves for next year.
“We’ve also built some contingency into the budget itself, so there is a couple of million pounds worth of contingency so it has some flexibility.”